← CRYPTO 101
Loading summary
Transcript90 lines
- [00:00]
Podcast Host
Are you curious about the economic forces shaping your daily life? The Planet Money podcast from NPR makes sense of the economy in ways you'll actually understand and enjoy. Guys, you love listening to the rundowns. I get some of that information from this NPR Planet Money podcast. Especially recently with the war going on the straight of Hormuz, you're just kind of getting those updates as they come from these guys. They put out a ton of awesome content. It's a different perspective from crypto101, but still a great listen. So go over there and check out the Planet Money podcast. If stuff like current events and the finance world interest you, each story on Planet Money starts with a question. Recent episodes ask why Pokemon cards are growing faster than your retirement count. Questions about the war. Just like we talked about recently a lot on our program. From the job market to the stock market to prices at the supermarket, Planet Money explains it all. Planet Money is a different kind of world where the complex economy somehow makes sense, where human stories supersede abstract theories so you can learn, laugh, and be entertained. It's econ, but just down to earth. The hosts go to unusual lengths to explain the economy. They've published their own book to track the global supply chain. They've shot a satellite into space to understand the economics of the private space industry. They've gone inside a live book auction to show how ideas get to market. It's the kind of show where you learn something, probably laugh and walk away seeing the world a little differently. And I think if you like crypto 101, you'll enjoy planet Money. So maybe check that out. Follow NPR's Planet Money podcast and understand how money shapes the world. One thing I love about summer is everything's just getting easier. You're outside more, you're taking vacations, and it's the time where you're really not trying to overthink every outfit. You just want stuff that feels good, works, and sometimes is a little cool. That's why I keep coming back to quints. They make those pieces that you end up just wearing all season. For me, it's the 100% European linen shirt and the matching linen pants that has become one of my go to beach vacation outfits. I've gotten so many compliments on it. It's breathable, it's comfortable. It looks put together, but it still feels relaxed. You can literally wear this thing, going to the beach all day, walking by the water for a sunset, and then head straight to dinner later feeling completely comfortable and looking fashionable. And that's really what Quint does well, they're 100% European. Linen pants and shirts are easy to wear, perfect for summer, and the price is unbelievable. And they start at literally just 34 dol. They also have soft tees you can wear all day, plus lightweight cotton sweaters that are perfect for when the temperature drops a little at night. Everything at quince is priced 50 to 80% less than similar brands. They work directly with ethical factories and cut out the middleman. So you're paying for exceptional quality, not the brand markup. And it's not just clothing. Quince has become one of those brands people trust for home travel and everyday essentials too. You've heard me talk about their website before. It's super fun to scroll around. They literally have everything. So make your summer wardrobe easier. Go to quince.com crypto101 for free shipping on your order and 365 day returns. Now available in Canada too. That's Q U I n c e.com/Crypto101 for free shipping and 365 day returns. Quints.comCrypto101 all right everybody, it is time for another crypto one on one podcast. If you heard me tease this last week, on Friday we are going to start rolling out our interviews from the out east conference presented by the tie. Bryce and I traveled up to New York City. We were invited by the tie. It was invite only and it was the who's who of crypto investing was there. We got amazing interviews. We got about 17 of them that we're going to be rolling out over the next couple of weeks. But before we do that, I want to make sure that you understand the setting that this was. We were on the road. We had a beautiful media garden set up, but we did have to deal with some weather. We had some rain, some wind come in. We had to move inside at one point. So I just wanted to set this up that I'm doing my best job producing this for you guys. I'm doing my best job editing for this for you guys. There's going to be the quality is top tier. There's a couple where there might be a little bit of background noise. I'm trying my best to edit that out for you, but I do want to set it up that these interviews are some of the best that we've ever done with some of the highest quality guests that we've ever had. So I need you guys to lock in. We're going to be dropping episodes every couple days over the next Couple weeks. Everything from former CFTC chairmans. We've got Potomac Partners, we've got Sovereign, we've got Monarch, we've got Dragonfly and Multicoin Capital. These are all the people that are making decisions in the space and have the money to move markets. So you're going to want to tune in, you're going to want to listen, you're going to want to subscribe, turn on the bell notification and enjoy this first episode with Josh Frank from the TIE who helped put all this together. And stay tuned for the rest of the great interviews this week.
- [04:48]
Host/Interviewer
All right everybody, we are here at the out east summit in the north fork of Long island with the conference organizer himself, the CEO and founder of the Tie, Mr. Josh Frank. Thank you for, thank you for joining me, but thank you for having me at your summit.
- [05:02]
Josh Frank
Thanks for having me on. And it's, it's great to be together have you here. I mean we've been friends for, since 2019. Yeah, I think we met at an etoro rooftop party during, in Los Angeles, some random conference.
- [05:14]
Host/Interviewer
I have no idea even what conference that was, but I vividly remember that and thinking wow, this is like one of the smartest guys I've ever met, if not the smartest guy in crypto.
- [05:23]
Josh Frank
Want to figure out a way tell he had drank a lot. That's the takeaway that he had.
- [05:29]
Host/Interviewer
No, dude, I mean you've been, you obviously built a great data company with the tie. I remember when it was just you and Ben and now it's how many
- [05:37]
Josh Frank
people work for you now across employees and contractors? Just over a hundred.
- [05:42]
Host/Interviewer
Yeah, it's insane. It's so love to see the growth and know proud to have been there since the start and now we've got this great conference with the likes of Fidelity here, Morgan Stanley, Invesco, Galaxy, I mean Coinbase, you know, pretty much every single big name on Wall street and in on crypto street as you will is here and they're all here because of you and, and the relationships you've built. And so before we dive into the tie, all the acquisitions you've recently had, the growth, the products, I mean you guys come out with a new product every week it feels like and these engineers, I think you're overworking these guys because it's incredible to see just the rate of production from your firm. But I want to start with the summit because this is, you know, such a great summit, as we've said, great guest. What kind of what was the thought behind coming out east, coming to The North Fork and inviting all these guests.
- [06:33]
Josh Frank
Yeah, I mean, the backdrop broadly is that crypto conferences can be pretty useless. When you go to a big crypto conference and there's thousands of people walking the floor, there's thousands of people, and they're random and they're unrelated to you. They could be service providers. It could be, you know, a hundred salespeople from the same. You know, you got a booth after booth after booth, and it's not. It's not intimate. And even if you find the people that you want to talk to, you pass by them in the hall for one minute, you don't get to sit down with them. And I've really found that the best events are events that bring together good people for a number of days and just give them an opportunity to connect and build relationships. And so with out east, the whole idea was basically, how can we bring people to a place where you can't go anywhere? There's nowhere to go. You can't go. There's no coffee shop.
- [07:16]
Host/Interviewer
You could run into the vineyard that way, the farm that way.
- [07:19]
Josh Frank
Yeah, that's about as far as you can. If you. If you go far enough, you go berry picking with somebody else, but, you know, there's not. There's not much that you can do. And so, you know, conceptually, the whole idea was create an amazing environment where people can spend time together and they can connect. And so we chose the North Fork, partially because I'm biased. I was married five minutes away from here. It was a great wedding.
- [07:36]
Host/Interviewer
It was a great wedding.
- [07:36]
Josh Frank
It was a great wedding. It was great having you there. Loved it. The. So I got married, you know, very close by, and it's an amazing area. And also it's very close to New York. Right. And so we wanted to do something that was accessible as well. So if you're in the city, you can drive out here in an hour and a half. And then when you're here, you know, we curate all these incredible experiences. Right. We have a lobster food truck, a pizza food truck. We have. Every attendee gets to make their own bottle of wine. They get to do wine tasting.
- [07:58]
Host/Interviewer
Yeah, we're doing wine tasting later, me and TiVo.
- [08:00]
Josh Frank
Yeah. So we wanted to create this. This. This amazing experience. And, you know, like, we started the event with, you could do a wine tour, you could go golfing, and, you know, you make a relationship, you meet somebody, and over the course of two or three days, you're able to do business together and grow it. And I think the thing that our Attendees appreciate. And why we can bring senior executives here is because we don't just allow random BD and salespeople and everyone.
- [08:21]
Host/Interviewer
It's not a pitch fest.
- [08:22]
Josh Frank
It's not a pitch fest. You know, we really. There's no vaporware. Right. It's really quality. And it's also. There's no. There's no. Obviously there's an agenda. They're speaking, but there's no agenda in that you're here to do whatever you want. If you want to talk tokenization, if you want to talk crypto, if you want to talk, you know, whatever it is that you want to investing, you know, you have that opportunity to do that, and you have this low key, incredible environment. If you want to go pull somebody over there, over there, you know, it's just a gigantic space to do that.
- [08:48]
Host/Interviewer
I got it. I got to backtrack to the golf night because I saw that on the agenda and I was like, I'm a high handicapper, right? I'm like a 30 plus. Like, we've golfed together.
- [08:58]
Josh Frank
We've done this together.
- [08:59]
Host/Interviewer
Yeah. You're like, I've seen you.
- [09:01]
Josh Frank
You've seen me too.
- [09:03]
Host/Interviewer
So would I be welcome next year at Saudi Summit? You know, or is the. Are these golfers just like, you know, absolute sticks?
- [09:09]
Josh Frank
So, so what was the vibe? First of all, we had. So I didn't, I didn't. I also didn't participate. I got to work on the game. And next year, I don't want to embarrass myself. I don't want to do your show. Next year we'll play together and, you know, maybe a couple mulligans. We'll.
- [09:21]
Host/Interviewer
We'll.
- [09:22]
Josh Frank
We'll make the scorecard. We gotta make it happen. Yeah, but no, we had a. We had a couple people that. It was their first time golfing. It was a scramble, so. Okay. Teams. Good. And we actually had a few amateur golfers that participated and didn't come in first place, which is so embarrassing.
- [09:34]
Host/Interviewer
Who came in first?
- [09:35]
Josh Frank
I don't know. It was a group of four. I'm not sure it was who was in it, but there were a couple sticks they. They shot six under.
- [09:41]
Jake Stauch
Wow.
- [09:41]
Josh Frank
Yeah.
- [09:42]
Host/Interviewer
Incredible. Yeah. What was the course you guys played?
- [09:45]
Josh Frank
I don't. I didn't play. It was somewhere 10 minutes away.
- [09:47]
Host/Interviewer
Okay, so up here. Long Island. Yeah. No, it's incredible. Look. So the summit's been great. Great content. How is it that you built these? This. I mean, I think truly, like, not, not to, like, honk your horn or whatever, but I think you are top 5 most networked people in crypto in terms of, you know, who you've built, who you have access to. Is that just by the nature of your business, you're providing data to everybody, or was there something special that you did to build this network?
- [10:14]
Josh Frank
I don't know. I mean, I've been doing it for so long, it's just a matter of, like, we met on a rooftop in LA during a random conference. Right. And, you know, maybe you're just approachable. No, I mean, well, when you first get started, you kind of just got to put yourself out there. I mean, I started the company, I knew no one. You know, I had nothing going on. And so it's just a matter of meeting people and meeting people through people and. Yeah, I mean, through the, you know, through the. The terminal and the institutional business, you know, made hundreds of different, you know, connections to customers and prospective customers, and it, you know, nine years later, you end up meeting a lot of people.
- [10:40]
Host/Interviewer
Yeah.
- [10:41]
Josh Frank
And being in New York, you know, we also used to host weekly happy hours in the city, and a lot of people come in and do things. And so it's. It's just. It's the culmination of knowing people for a very long time and doing something for a very.
- [10:53]
Host/Interviewer
And I think it's that rule, like, I don't know what the rule is, but, like, you provide value. You very rarely ask for people to give you value. You're a giver, not a taker. And I think that's one thing that, like, why people are attracted to, like, coming to your conferences and working with you, because you. I mean, you're literally hustling around every single different food truck, every single different thing, you know, hey, how are you enjoying the conference? Who do you want to meet? And everybody who I'm asking, they're like, yeah, like Josh is asking me, you know, making all these introductions. So you. You do the legwork. But anyhow, let's dive into the tie. Let's dive into, you know, what you guys are building on, what you guys are working on. Start us at a high level before we zoom in for folks who are, you know, watching, whether they're a retail trader, whether they're an institution. What does the tide do?
- [11:36]
Josh Frank
Yeah, well, that's, you know, it depends on when you ask the question. Sure. So the answer is actually going to change. We have a public announcement in a week or two which will slightly change. Change that. But broadly speaking, Cliffhanger. Wow. It's a cliffhanger. It's a, it's a, it's a regulatory related reason why I can't, I can't.
- [11:53]
Host/Interviewer
I'm happy with that. Yeah, right.
- [11:55]
Josh Frank
The. But what we do broadly is we really help institutions interact with digital assets and that's in a number of ways. So we started as a data company and so we built the Thai terminal on APIs, which for anyone listening think of like a Bloomberg or fax, that type platform for crypto, which service hundreds of hedge funds, asset managers, VCs, bank market makers, OTC desks. So that's kind of where we started but over the years we really expanded that. So the first thing we expanded that with was events. And so we realized a few years ago we knew all the institutions because of our business. We also do a lot of the protocols. We realized the protocols, the institutions didn't really have great places to connect. So in traditional capital markets, investment banks put on sell side research conferences. So you know, think, you know, tier one bulge bracket bank will put on a conference, they'll bring the CEOs of all the public and private fintech companies with private equity firms, asset managers, hedge funds, the like in crypto that didn't really exist. So a few years ago we started putting on our first events focused on actually helping protocols connect with institutions. That's really the genesis. Yeah, our first event was called the Bridge because we wanted to bridge protocols, institutions together. So that's how we got started. As we built that out more, we realized that there was something that both of our customers had in common is that they had a lot of tokens. And so we acquired at the end of last year they had a lot of tokens and they didn't necessarily want us to pay us cash, but they had a lot of tokens that they weren't really, you know, using for, for much. And so at the end of last year we acquired a business called Stake in which is a 2 billion asset under delegation staking business. And the idea was we could go to our clients, we could say, look, you want to be part of, you know, our events, you want access to our data, you want access to our information, delegate your stake to us. We'll charge you the same rate as any other staking provider. It's the same, the same terms, everything but you get additional value because ultimately, you know, staking providers are giving you the same rate, the same infras. There's no differentiation. No differentiation.
- [13:34]
Host/Interviewer
100% up time, like all.
- [13:35]
Josh Frank
Yeah, it's all, it's all the same shit. Right. And so you can get more by delegating to us. And so that's kind of how we got started.
- [13:40]
Podcast Host
You know what slows teams down more than anything? It's not always headcount, budget, or even the tools themselves. It's when the way work gets done lives in someone's head and never actually gets documented. Then someone new joins, a new platform, gets rolled out, or a teammate leaves and suddenly everyone's doing the same process in a different way. That's exactly the problem today's sponsor, Scribe, was built to solve. Scribe is a workflow AI platform that captures any workflow in real time and turns it into a step by step documentation automatically. You just turn on the extension and do the process like you normally would. And Scribe builds the guide as you go, capturing every click, step and screenshot. And it's already trusted by over 80,000 enterprises, including nearly half of the Fortune 500. With our team being remote, I have definitely had moments where I've had to explain the same setup or process more than once to a colleague. And it always feels like something that should have been documented the first time. With Scribe, what could take hours of writing, scribble shots and cleanup can be ready to share in under a minute. Scribe also automatically redacts sensitive information like names, emails and account numbers from screenshots. Admins can enforce that across the team so nothing slips through the cracks. Plus, anyone following the process can get real time on screen guidance showing exactly where to click inside the actual tool. And Scribe doesn't just document workflows, it uses AI to suggest ways to improve them, helping you spot redundant steps, bottlenecks and places to simplify. To book a personalized enterprise demo, visit scribe.how/Crypto101 that's S C R I B E.how/Crypto101 if you've been sitting on a business idea, Shopify is the place where you can actually make it real. The thing I like about Shopify is it takes the scary part out of starting. You're not just sitting there trying to figure out a website, payments, checkout, inventory, all these little things that stop people before they even launch. When I think about building a storefront, the biggest thing is friction. You want someone to land on your page, like what you're selling, and be able to buy without getting stuck. That's where Shopify is huge. Shopify Checkout is built to help more customers finish their purchase, and when they come back, their details are already saved. One tap and they're done. The cool part is Shopify powers Millions of businesses worldwide, from huge brands that you know, like Mattel and Gymshark to small businesses just getting started. So whether you're building the next big brand or launching your first product, the infrastructure is already there. Once that part is handled, you can focus on the real work. Building the brand, getting attention, and bringing people to your storefront so the business can grow. That moment when someone actually buys, that's when the idea becomes real. With Shopify, nothing stands between your idea and a real business. So go make it one. Start your free trial today at shopify.com crypto101 that's a free trial at shopify.com
- [16:34]
Jake Stauch
crypto101 I'm Jake Stauch, co founder and CEO of Cerval. We built Servl to automate the IT work that slows companies down. Onboarding, password resets, access to applications. My laptop stopped working. While employees wait for help, their real work is put on hold. It desperately wants to automate this work and that's why they need Serval. You just tell Servil what you want to automate in plain English and it's built. No drag and drop workflows, no expensive consultants. Employees get unblocked and IT teams go from drowning in tickets to building what actually matters. With Cerbal, it becomes the AI engine powering the entire company. This is a new way to run it. We guarantee you'll automate 50% of all tickets and we'll prove it to you in a free four week pilot. Go to cerbal.com tickets. That's S-E-R-V-A-L.com tickets.
- [17:36]
Josh Frank
We also just announced that we acquired a business called StakingRewards.com, which is the top staking and yel data platform in this space.
- [17:44]
Host/Interviewer
Back in the day, I mean, I've made walkthroughs of stakingrewards.com for our community, you know, like how to use this platform, how to find them. And so it's, it's cool to watch this full circle because I'm gonna have to make a new website or a new video about the new website and stuff.
- [17:57]
Josh Frank
Well, it's the same website. It just says buy the tie. It looks good. But we just acquired that business for a few reasons. The first is, you know, it allows our customers to get access to more data, more information which we can bring into the terminal, but we can also bring just staking rewards and for, you know, all your users, more data from the terminal. So we'll be able to bring more insights More analytics to make that power, that platform even more powerful. But what's really exciting to me and I think was under underappreciated by the Staking Rewards team. And they continue to work with us and you know, and they, they do appreciate it, but is there's a million people that visit the website every single year. Why do they visit? Because they care about yield. And to me, you could turn that into a lot. Right. And so we do a lot of work with protocols and we can help get them more exposure and present yield opportunities. And for us, it's moving more than just staking. It's at the DeFi yield and RWA yield and making it more of a yield focused platform. And we also just acquired a platform called Liquidity Land, which is a platform that helps DeFi projects raise TVL. And they've helped projects raise collectively over 100 million in TVL. And what's really cool, as a user, you can come on the platform and you'll get additional yield versus going anywhere else. So there's additional incentives. So you go and you deposit on a platform, maybe I'll get 5% yield going directly to a lending protocol, but through us you get 5.1%. And it's basically incentives that the DEFI protocols are willing to give to bootstrap growth on their network. And so for the DEFI protocols that we're working with, we now are able to give them exposure to institutions. We'll be able to bring exclusive deals onto the terminal. We'll also be able to syndicate the deals onto stakingrewards.com to the million million users. Synergy, baby. And so all of these things really work together. But it's all about helping protocols get exposure to institutions and then helping institutions understand digital assets, get exposure to digital assets, get information about digital assets. But really it's at the intersection of institutions, digital assets and protocols. Yeah, I love it.
- [19:39]
Host/Interviewer
Tell us, walk us through. Like, you know, how do these deals come together? Are you, you know, in a boardroom and people are pitching you ideas? Are you coming up with ideas? Are you going out and calling people and saying, are you for sale? Like, walk us through, you know, from the CEO perspective, how an acquisition actually gets done.
- [19:58]
Josh Frank
Yeah, I mean, it's, it's. There's no shark tank. You know, I'm not sitting over there later today. And if anybody does want to come pitch me, please do reach out. You know, you have to hear what you have. And we continue to be active in the space. You know, I think maybe we want a Break from acquiring business in three and six months. I think maybe a little pause. But we are active and the right opportunities will present themselves. We have investment bankers often come and send us decks and present us opportunities. There are spaces that we knew we wanted to acquire a staking business, so we looked at multiple staking businesses and actually wasn't even familiar with the stake and brand before. And we got approached by a bank with that opportunity. So it's a mix. Sometimes founders come directly to me. It's also talking to the liquidity land deal, actually. They had referred us customers for some of our other products. And a salesperson of my team who works with them said, hey, you know, these guys are looking for an exit. You want to chat with them. And, you know, went from that to being part of the tie in probably like 100 days or so. It was pretty quick.
- [20:52]
Host/Interviewer
Yeah, crypto moves fast.
- [20:53]
Josh Frank
Yeah. So, yes, they're pretty quick. But yeah, I mean, we're. We're open for business.
- [20:58]
Podcast Host
Love it.
- [20:58]
Josh Frank
Yeah.
- [20:58]
Host/Interviewer
In terms of, you know, the programming that you guys have put on, there's been so many good, you know, good stories being told from the regulatory perspective, the liquid active, you know, hedge fund perspective, the Wall street tokenization perspective. I've seen stuff on prediction markets, on perpetuals. Where in your mind is the most. I mean, there was some talks on AI in crypto. Where in your mind is the most exciting for the next, you know, call it six to 12 months of where crypto is going.
- [21:27]
Josh Frank
Yeah. So, I mean, to me, it's. To me, it's actually not been as much of a discussion than partially discussion, but it's what we're really excited about, which is this concept of converting tokens into equity. Converting tokens into equity.
- [21:38]
Jake Stauch
Whoa.
- [21:38]
Host/Interviewer
I've heard converting equity into tokens.
- [21:41]
Josh Frank
So. Converting tokens into equity. So I agree. Yeah. So there's a few reasons why I think that this is really meaningful and it matters. So the first thing is, when you're a founder of a company, right, you know, you own part of. Part of crypto 101. Right. You own a decent chunk. I don't know how much you own, but let's say you own 10%, 15%, 20%, 30%. Founders of protocols. You know, as a lot of you guys have seen token distribution charts, 10%, 15% goes to the team. The founder might have 2% or 3%.
- [22:08]
Host/Interviewer
Yeah. And he's the one who's working day and night. Reputational risks.
- [22:12]
Josh Frank
Right. And so, you know, when the token's at 10 billion in market cap. Fantastic. You're worth $300 million. Who gives a shit?
- [22:18]
Host/Interviewer
Yeah.
- [22:18]
Josh Frank
When the token's sitting at 50 million market cap, you know, they have 100 grand worth of the thing. And ultimately, you know, with AI and all the opportunities that, you know that are available, you might get a better signing bonus than that, go somewhere else or, or whatever. It's just the opportunity cost of leaving is, is no longer very high. So that's the first issue. The second, and then you can't, you can't issue yourself more shares because there's that set pool. Right, Right. And with an equity business, like if you guys wanted to hire more employees, or we wanted to hire more employees, we could expand our employee stock option pool and basically dilute everyone to create more shares for employees. Right. With a token, you can't do that. The second thing is you can't raise more money. So you go out, you launch a token. You've raised money before, Maybe you've raised $30 million to launch your token. Your token's now sitting at a hundred million in market cap. And the foundation only has 5% of the tokens left. So the most you can do, you can't raise again. So you have $5 million of the token. Let's say you need $10 million in capital. You can't raise $10 million. You have no mechanism for doing that. With an equity business, you could dilute yourself to zero. I mean, you could, you could continue to raise as much as you wanted to. And so, and you know, when you went out and you raised originally, maybe you raised for five years of Runway and, and you thought the token would exist and it'd be at a high value, you could sell the token to continue your Runway. Now you can't do that.
- [23:28]
Host/Interviewer
Yeah.
- [23:28]
Josh Frank
The other problem is you have this buyback incentive. And so everyone is asking for buybacks. Buybacks, buybacks, buybacks. If you're a big product like a hyper liquid, and you're very profitable, you can do buybacks and you should do buybacks. But if you're a smaller early stage defi protocol that has 10 million in revenue and maybe 1 million in profit, you know, you shouldn't be buying back your token holders like investors.
- [23:51]
Host/Interviewer
You want to reinvest in the growth.
- [23:52]
Josh Frank
You want to. Yeah, exactly. Like, you know, if you guys just took all your profit and dividended out and didn't launch new products and new podcast series and all of that, like, you would not be where you are today. And there's this perverse incentive with tokens. To buy back. And by the way, you're buying back and token prices even going up. Right. And so there's all sorts of different.
- [24:07]
Host/Interviewer
Sometimes.
- [24:07]
Josh Frank
Sometimes, sometimes. But like a lot of the times it's not. And so there's all these perverse incentives that. That really limit the growth of companies, force them to operate in ways that they wouldn't normally operate in.
- [24:16]
Host/Interviewer
Right.
- [24:16]
Josh Frank
And so I'm very excited about the concept of basically killing the token, converting to equity. And then basically what that allows you to do is you convert like the top five or top 10 holders directly to the cap table, maybe holder 10 to 100 in SPV, like in a vehicle that you basically just sits one vehicle on the cap table with the token holders and then everyone else gets bought out at a premium to what they're holding it at. So let's say, let's say the token's a dollar. Maybe you get the opportunity to sell your tokens at a dollar and five cents. And so that way you're not screwing the average investor.
- [24:44]
Host/Interviewer
Right.
- [24:44]
Josh Frank
I think ultimately actually what it will do is it will cause token prices to go up, foreseeing that more of these opportunities will happen. Yeah. So I think it's actually will be a boon for crypto and what I'm ultimately very excited about. And then what you do is you effectively. So you basically bring over the top five holders record on the cap table every. They then basically delegate a pool of capital which will be used to buy out the others. They say we will increase our exposure by $10 million or whatever it is. And then basically you then issue a new employee stock option so everyone gets common stock. You issue a new employee stock option pool on top of that and basically dilute everyone. So founders can get a little bit more shares, but so can the employees. And then you raise a new round of preferred stock and dilute everyone on top of that so you can continue to grow. But ultimately where I think it's really exciting and really interesting is when on top of that you tokenize the equity and allow the everyday investor to get exposure to the tokenized equity. Because equity is just a better way to get exposure to these projects. I just think it's more efficient and it's better for it to be an equity than to be a token. And with tokens you just don't have any rights.
- [25:42]
Host/Interviewer
Right.
- [25:42]
Josh Frank
Like ultimately you can get rug pulled if you're an equity holder. You have rights, you have investor protections. Right. I think it's ultimately better and I don't think it makes sense for like it doesn't make sense for an L1 that has a gas token. Right. But I think it makes sense for a lot of DeFi projects and RWA projects that have real revenue AI projects as well. And I think ultimately, obviously there's, you know, there's regulatory restrictions on this. But I think allowing people to go from being holders of tokenized crypto to tokenized equity is ultimately better. And I don't think that kills any of the ethos of crypto. It's still about giving exposure to the masses and letting everyone participate. But it's in a form that's better and has better protections for you as an individual.
- [26:15]
Host/Interviewer
It's, it's fascinating. You know, we've done, we were talking, you know, 750 interviews and nobody's ever said that one. So that, that's a new, a new take. And you know, it's something that I'm personally going to want to dive in on on more what's, what's stopping the market from moving that direction because again, this is an out of consensus view. Is it? You know, the entrenched interests of, you know, these large companies, like you know, the Ethereum foundation is very difficult.
- [26:40]
Josh Frank
Yeah, it sounds very difficult. It requires a lot of thought. Stay tuned for an announcement coming from us in a couple of weeks.
- [26:48]
Host/Interviewer
Interesting. Yeah, I know like Coinbase acquires like, you know, what do they call it, an Aqua hire where they, they for Axel are not to put them.
- [26:55]
Josh Frank
So the difference between that and this is we're not trying to screw anybody.
- [26:57]
Host/Interviewer
Yeah.
- [26:58]
Josh Frank
So this is how can we thoughtfully bring a token community into equity holders, at the very least make sure that the token holders are getting more than what their tokens worth today. It's like I really want, I don't want to, I want to structure. I want to, you know, talk to people about structuring these deals in ways that don't screw the community.
- [27:15]
Host/Interviewer
Yeah.
- [27:16]
Josh Frank
The whole goal is you can't, we, you could do this and kill the token and it doesn't matter. It's not about killing the token, it's about doing right by the investors. Because ultimately even if you don't have a fiduciary duty to do that, I think it's the right thing to do.
- [27:28]
Podcast Host
Yeah.
- [27:29]
Josh Frank
And so it's just, it's complicated. There's a lot of legal complications.
- [27:32]
Podcast Host
Sure.
- [27:32]
Josh Frank
How do you structure the deal? Where do you structure the deal? How do you convert people over? What do you do with the token? The token is property, so you can't kill the token. You don't actually kill it. You set it to a burn address. The token has to continue to exist in parallel, but it's a meme coin. Effectively, it's worth anything. There's a lot of considerations, both from a capital markets perspective on how you do it, as well as from a regulatory perspective.
- [27:51]
Host/Interviewer
I love it. Well, that's the crescendo to end it on. I don't think we could get any better than that. So Josh, thank you so much.
- [27:56]
Josh Frank
Thanks for having me.
- [27:57]
Host/Interviewer
Thank you for having me, everybody. Welcome at the Audi Summit. Sponsored and brought to you by Josh Frank from the tie. Stay tuned. We're going to have a lot of great guests coming to you live from the Audi Summit.
- [28:20]
Grainger Sponsor Voice
When you're a maintenance engineer in a beverage manufacturing plant, you keep production lines moving and quality on track because there is no room for slowdowns. With Grainger's vast selection of high quality motors, sensors, belts and hard to find parts, you can get what you need fast and all in one place, so nothing gets in the way of getting the job done. Call 1-800-GRAINGER clickranger.com or just stop by Granger for the ones who get it done. This episode sponsored by Evie if the same vaginal symptoms keep coming back and no one can tell you why, you're not imagining it and you don't have to keep guessing. That's why EEVEE exists. Evie's at Home Vaginal microbiome test goes beyond traditional testing by analyzing over 700 bacteria and fungi with a single swab so you can see what may really be going on in your vaginal microbiome. Your results are reviewed by a licensed clinician and you'll get personalized insights, clear next steps, and access to care options if eligible. Plus, every test includes a free one on one call with a certified health coach. Stop guessing. Get answers with evvy@evvy.com Visit evvy.com today to order your at home test and get personalized answers about what's really going on.
- [29:39]
Aura Sponsor Voice
Most people don't realize how much their personal information is being bought and sold every day. Data brokers are making billions, pulling details about you from public records and the Internet and then packaging and selling it, usually without your consent. That's how your information lands in the hands of scammers, spammers, even stalkers. It's why you get endless robocalls and why ads seem to follow you everywhere. That's where Aura comes in. Aura actively removes your data from broker sites and keeps it off. They also instantly alert you if your information shows up in a breach or on the Dark Web. But Aura goes beyond data protection. With one app, you get a vpn, antivirus, password manager, spam, call protection, dark Web monitoring, and even up to $5 million in identity theft insurance. All backed by 24. 7 US based fraud support. Other companies might sell just credit monitoring or just a vpn. Aura gives you all of it together at the same price competitors charge for just one service. Start your free trial today at Aura. Com Remove Protect yourself now at Aura. Com Remove.